Defendants
move under Federal Rule of Civil Procedure 12(b)(6) to
dismiss the first five counts in the Second Amended Complaint
("SAC") for failure to state a claim upon which
relief can be granted. For the reasons that follow, the
motion is granted in part and denied in part.

BACKGROUND

Plaintiff
Federal Deposit Insurance Corporation ("FDIC")
commenced this action as receiver for Colonial Bank
("Colonial") seeking to recover damages incurred by
Colonial from misrepresentations made by the defendants in
connection with Colonial's purchase of residential
mortgage backed securities issued or underwritten by the
defendants in violation of the Securities Act of 1933 (the
"1933 Act").

The SAC
alleges that the "defendants issued, underwrote, and/or
sold eight securities known as "certificates" (the
Certificates) which were backed by collateral pools of
residential mortgage loans." SAC (Dkt. No. 178) SI 1.
Colonial, located in Montgomery, Alabama, purchased those
certificates between June and September of 2007 through a
wholly owned Nevada based subsidiary. Id. ¶ 2,
Schedules 1-11, Item 37(b). As the housing market collapsed
many of the loans backing the certificates defaulted and
Colonial incurred heavy losses. On August 14, 2009, Alabama
regulators closed Colonial and appointed FDIC as receiver.

The
certificates were created in a process known as
securitization. Id. ¶ 24. That process begins
when an originator issues loans to borrowers to finance the
purchase of homes. Id. Those loans are issued
pursuant to the originator's underwriting standards which
ensure that the borrower will be able to repay the loan.
Id. The originator then takes a large number of
similar type loans, known as a collateral pool, and sells
them, along with the right to cash flow from those loans, to
a trust. Id. SI 26. The trust pays for those
collateral pools by issuing securities, known as
certificates, which are sold to investors. Id. Each
certificate entitles its holder to an agreed part of the cash
flow from the collateral pools. Id.

The
prime mover of the securitization is known as the sponsor.
Id. ¶ 31. Sometimes, the sponsor is the
originator of the loans. Id. Other times, the
sponsor is an investment bank. Id. The investment
bank purchases loans from one or more originator, aggregates
them into a collateral pool, and sells the collateral pool to
an entity known as a depositor. Id. The depositor
then sells the collateral pool to the trust. Id. The
trust does not sell its certificates directly to the
investing public. Rather, investment banks known as
underwriters prepare, sign, and file necessary disclosure
documents with the United States Securities and Exchange
Commission ("SEC"), purchase the certificates from
the trust, and then sell those certificates to investors.
Id. ¶ 33.

Because
potential investors do not have access to the loan files,
they rely on the information contained in the disclosure
documents that the underwriters file with the SEC.
Id. ¶ 35. Those documents contain information
compiled by the underwriters about the loans in the
collateral pools backing the various securities. Id.

Specifically,
the SAC alleges that defendants Credit Suisse Securities
(USA) LLC, RBS Securities Inc., HSBC Securities (USA) Inc.,
and Deutsche Bank Securities Inc. (collectively the
"underwriter defendants") underwrote and sold to
Colonial five of the certificates at issue. See id.
¶¶ 118-33. Defendants FTN Financial Securities
Corp. and UBS Securities LLC underwrote two of the securities
that Colonial purchased. See id. ¶¶
230-31. Defendants First Horizon Asset Securities Inc. and
Wells Fargo Asset Securities Corporation (collectively the
"depositor defendants") were the depositors for
four of the certificates that Colonial purchased. See
id. ¶¶ 134-43. Defendant First Horizon Home
Loan Corporation controlled First Horizon Asset Securities
Inc. during the time period covered by the SAC. Id.
¶ 14.

FDIC
alleges that the underwriters for the eight certificates at
issue filed prospectus supplements with the SEC that
contained many statements that were material to Colonial in
deciding to purchase the certificates, but were untrue or
misleading. Id. ¶¶ 36-104.

The SAC
asserts seven claims to relief. Count A seeks to recover
damages incurred by Colonial against the underwriter and
depositor defendants for untrue or misleading statements in
the sale of securities under Section 8-6-19(a)(2) of the
Alabama Securities Act. Id. ¶¶ 117-47.
Count B seeks to recover damages from First Horizon Home Loan
Corporation under Section 8-6-19(c) of the Alabama Securities
Act which imposes liability on entities that control those
who make untrue or misleading statements in the sale of
securities. Id. ¶¶ 148-51. Count C seeks
to recover damages incurred by Colonial against the
underwriter and depositor defendants for untrue or misleading
statements in the sale of securities under Sections 90.570(2)
and 90.660(1)(d) of the Nevada Uniform Securities Act.
Id. ¶¶ 152-82. Count D seeks to recover
damages from First Horizon Home Loan Corporation under
Section 90.660(4) of the Nevada Uniform Securities Act which
imposes liability on entities that control those who make
untrue or misleading statements in the sale of securities.
Id. ¶¶ 183-86. Count E seek to recover
damages incurred by Colonial against the underwriter and
depositor defendants for untrue or misleading statements in
the sale of securities under Section 12(a)(2) of the 1933
Act. Id. ¶¶ 187-222. Count F seek to
recover damages incurred by Colonial against the underwriter
and depositor defendants, FTN Financial Securities Corp., and
UBS Securities LLC for untrue or misleading statements in a
registration statement under Section 11 of the 1933 Act.
Id. ¶¶ 223-38. Lastly, count G seeks to
recover damages from First Horizon Home Loan Corporation
under Section 15 of the 1933 Act which imposes liability on
entities that control those who make untrue or misleading
statements in violation of Sections 11 and 12 of the 1933
Act. Id. ¶¶ 239-42.

Procedural
History

FDIC
filed its initial complaint in this matter on August 10,
2012, asserting claims to relief under Sections 11 and 15 of
the 1933 Act which prohibit untrue or misleading statements
in a registration statement, and impose liability on entities
that control those who make untrue or misleading statements
in a registration statement. See Compl. (Dkt. No.
1). In response to the defendants' motion to dismiss,
FDIC filed an amended complaint on December 4, 2012, again,
only seeking relief under Sections 11 and 15 of the 1933 Act.
See Am. Compl. (Dkt. No. 72).

After
initially denying defendants' motion to dismiss the
amended complaint, see FDIC v. Chase Mortg. Fin.
Corp., No. 12 Civ. 6166 (LLS), 2013 WL 5434633, at *1
(S.D.N.Y. Sept. 27, 2013) (Dkt. No. 86), on August 29, 2014,
I granted their motion for judgment on the pleadings, finding
that FDICs claims were barred by the 1933 Act's statute
of repose, see FDIC v. Chase Mortg. Fin. Corp., 42
F.Supp.3d 574 (S.D.N.Y. 2014) (Dkt. No. 150). On May 19,
2016, a panel of the United States Court of Appeals for the
Second Circuit vacated that judgment and remanded the case
for further proceedings consistent with its opinion. See
FDIC v. First Horizon Asset Sec, Inc., 821 F.3d 372 (2d
Cir. 2016) (Dkt. No. 153). On January 9, 2017, the United
States Supreme Court denied the defendants' certiorari
petition. See First Horizon Asset Sec, Inc. v. FDIC,
137 S.Ct. 628 (2017).

On June
8, 2017, FDIC informed defendants' counsel of its
intention to move for leave to amend its complaint to add
additional facts regarding Colonial's investment
processes and to assert additional claims under Alabama and
Nevada law and Section 12(a)(2) of the 1933 Act. Valdes Decl.
(Dkt. No. 198) Ex. 2. Defendants' counsel replied that
defendants would not oppose the motion for leave to amend,
and that they would raise what they saw as defects in the SAC
in a motion to dismiss. Id. FDIC notified the court
by letter dated June 14, 2017 that it intended to move for
leave to file a SAC. At a conference held on June 16, 2017, I
granted FDIC's unopposed motion to file the SAC, while
reserving the defendants' rights to move to dismiss the
claims in the SAC. See Tr. of June 16, 2017
Conference (Dkt. No. 181) at 3-4.

On June
21, 2017, FDIC filed and served the SAC, [1]reasserting its
two claims under Sections 11 and 15 of the 1933 Act (Counts F
and G), and adding five new claims (Counts A and B under
Alabama law, Counts C and D under Nevada law, and Count E
under Section 12(a)(2) of the 1933 Act).

Defendants
now move to dismiss the five new claims brought under the
securities laws of Alabama and Nevada and Section 12(a)(2) of
the 1933 Act as time-barred by the relevant statutes of
repose and limitations. They also argue that the newly added
claims should be dismissed because FDIC unduly delayed in
bringing them.

Additionally,
they move to dismiss the claims against the depositor
defendants for untrue or misleading statements in the sale of
securities under Alabama and Nevada law because the SAC does
not allege that those defendants sold certificates to
Colonial.

DISCUSSION

Time-barred
Claims

The
statute of repose for claims under Section 12(a) (2) of the
1933 Act is three years from the sale of the security. 15
U.S.C. § 77m. The statute of repose for the claims under
the Nevada Uniform Securities Act is five years from the sale
of the security. Nev. Rev. Stat. § 90.670. The Alabama
Securities Act claims are not subject to a statute of repose
but are subject to a two year statute of limitations from the
time the violation is discovered or should have been
discovered by the exercise of reasonable care. Ala. Code
§ 8-6-19(f). The FDIC extender statute extends FDIC s
time to sue by three years from when it is appointed
receiver, if that period is longer than the otherwise
applicable period. 12 U.S.C. § 1821(d) (14) (A) (ii)-(B)
.

Colonial
purchased the certificates at issue between June 5, .2007 and
September 24, 2007. See SAC Schedules 1-11, Item
37(b). The claim under Section 12(a)(2) of the 1933 Act for
the last security purchased expired on September 24, 2010,
and the claims under the Nevada Uniform Securities Act for
the last security purchased expired on September 24, 2012.

As for
the Alabama Securities Act claims, the SAC alleges that the
misstatements at issue could first have been discovered on
August 15, 2008, the day after the files compiled by the loan
originators and the records maintained by the loan servicers
became available to Colonial. Id. St 106. Indeed,
the rating agencies downgraded their ratings for each of the
eight certificates at issue approximately four to eight
months after that date. Id. ¶ 110. Accordingly,
the two year statute of limitations on the Alabama Securities
Act claims expired on August 15, 2010.

FDIC
was appointed receiver for Colonial on August 14,
2009. Id. SI 12. Its time to bring a claim under
Section 12(a) (2) of the 1933 Act and under the Nevada
Uniform Securities Act for securities purchased before August
14, 2007 was extended to August 14, 2012. Its time to bring a
claim under the Nevada Uniform Securities Act for securities
purchased after August 14, 2007 was unaffected. Its time to
bring claims under the Alabama Securities Act was extended to
August 14, 2012.

FDIC
filed its complaint on August 10, 2012, and filed its amended
complaint on December 4, 2012. Both the complaint and the
amended complaint only asserted claims to relief under
Sections 11 and 15 of the 1933 Act. By the time FDIC filed
its amended complaint, all the new claims at issue here were
time-barred. The new claims were not brought until June 21,
2017, approximately ten ...

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